If team incentives are to be implemented successfully in Japan, the United States, and Europe (for example, as in Royal Dutch Shell - see the case study), it is necessary to examine some of the cultural aspects of these three places.
Japanese corporations have attracted a lot of research interest in the last 20 years for their collaborative, team-based cultures. Hofstede (1980) has described the Japanese as having high uncertainty avoidance . At the same time, they attach a lot of importance to saving face and not making a person look bad in public. According to Copeland (1985), the Japanese go to great lengths to give negative feedback in a manner that is palatable to the recipient. People ignorant of the Japanese culture are often taken aback by the ' beating about the bush' that the Japanese resort to in the interests of maintaining harmony.
Katayama (1989) points out that managers in Japan are conversant with English. In many respects the Japanese are quite westernized, and this should not cause astonishment to a foreign visitor. A few practices are quintessentially Japanese. The traditional Japanese flooring, called tatami, is a straw-coloured reed mat laid wall to wall. The Japanese remove their footwear when they enter houses or rooms where tatami is used, and walk around in stockinged feet. Naturally they expect foreigners who come to restaurants or homes that use tatami to remove their footwear first. Managers from other countries who go to Japan should also adopt another Japanese custom immediately, since it means so much to the locals. This pertains to the use of business cards. In Japan, business cards are given and received with both hands. When Japanese people receive a business card, they read it carefully as a mark of courtesy . They also do not feel comfortable with unnecessary physical contact such as backslapping or elbow jostling.
Japanese managers like to organize periodic social events where managers give a performance, usually involving singing , often in the form of karaoke .
However, the Japanese do not necessarily expect managers from other cultures to greet them with a bow from the waist downwards. Japanese managers generally greet managers from other cultures with a handshake, although when they greet each other it may be with a bow. All the managers interviewed for this book agree that greeting with a handshake has become an international practice.
What is most fascinating about the culture surrounding Japanese management is the concept of the Japanese work group. Pascale and Athos (1982) have noted, 'to the Japanese, the birth of a group entails many of the concerns and worries attending the birth of a child'. They realize that mature, cohesive groups that arrive at decisions by consensus are not formed overnight. On the contrary, such groups require continuous attention and monitoring. Japanese managers expect to spend time and effort maintaining group harmony and effectiveness. Hence, Japanese groups tend to encourage participation without conflict or confrontation. Groups strive for qualitatively superior decisions, since it is a group that is rewarded for its performance. Individuals do not aspire for recognition on their own, since there is usually no proviso for this in Japanese companies. Holt opines that when it comes to promotions, preference is given to managers who can contribute to a congenial group atmosphere. When living in Japan, the author of this book noted that the Japanese word 'omayari' was used in conjunction with the managerial effort to enhance group harmony. There is no word in English that corresponds directly to 'omayari'. 'Omayari' is an amalgam of empathy, compassion and concern.
The US management culture has traditionally encouraged and rewarded individual achievement. Individual achievement is so highly valued by American corporations that they place a premium on recruiting managers with a high need for achievement. McClelland (1985) even studied how this trait could be enhanced so that US corporations could benefit.
It has been observed that in US companies the informal group has considerable influence, and may even work against company objectives. Thompson (1983) reported that the group he had observed at a beefprocessing plant in the United States 'practically made a game out of doing forbidden things simply to see if they could get away with it'. On the other hand, Krackhardt and Hanson (1993) stipulate that informal networks can yield positive results to a corporation when they are properly understood and handled. These researchers found that three types of informal relationship networks existed in the US banking industry. Their recommendation was that corporations should revamp their formal organization structures to allow these informal relationship networks to thrive. When the informal structure is allowed to complement the formal one, the former can be used to solve problems, improve the quality of work life, and enable the corporation to show superior performance. Among other things, informal relationship networks can cut through reporting procedures in a beneficial way.
As far as formal groups are concerned , the US researcher Janis (1982) warned of the perils of excessive group harmony. Such groups could fall prey to what he termed as groupthink . A lot of importance is attached to the concept of transformational leadership in corporate America today. This concept centres on developing global companies so that all managers are motivated to perform at their very best, to articulate visions that inspire all these managers, and to enable managers to participate in the leadership process (Burns, 1978). Proponents of transformational leadership in the United States frequently present such figures as Thomas Watson Jr of IBM, Jack Welch of GE, and the late Sam Walton of WalMart, as examples of transformational leaders .
Transformational leaders are supposed to shake up established ways of thinking among managers, challenge groupthink syndromes, and encourage others to do so too. To challenge fellow group members may create tension among them, but it is believed to act as a deterrent to unproductive groupthink.
Many US employees reported that they did not find teams to be an improvement over more hierarchical forms of organizational structure. Management by bosses was merely replaced by management using peer pressure. Many US employees averred that the latter system could be as oppressive as the former. An article published about the perils of teams in 1995 quoted an employee of New United Motor in Freemont as saying, 'People try to meet the team's expectations and under peer pressure they end up pushing themselves too hard' ( Economist , 1995).
We now examine certain aspects of European culture before we return to the case study of Royal Dutch Shell and see how that global corporation was able to effect organizational structure changes in Japan, the United States, and Europe. From a management perspective, the formation of the European Union (EU) has been an interesting development. Hendry (1994) has reported that the EU has undertaken many initiatives to improve mobility within its boundaries. Although the EU has gone a long way in standardizing commercial regulations and labour laws, there still exist cultural differences between countries.
A survey undertaken by the Ashridge Management College in the United Kingdom (Durcan, 1994) is revealing . This survey took into consideration the views of senior managers in 14 European countries, and found that 'Such is the cultural diversity of Europe, that at this moment there is no single model which is capable of taking into account the complete range of national values.' It found huge differences in perspectives among European countries. This conclusion was confirmed by an independent study conducted by the Cranfield School of Management, which developed profiles of over 2,500 European executives. Nordic countries were seen as preferring teamwork and transparent communication. However, there was no universal consensus among Nordic managers about how team processes were to be managed. German-speaking countries seemed to believe that efficiency was achieved through hierarchical systems. Those managers who occupied senior positions owed their position to demonstrated technical competence and expertise. Managers from Anglo-Saxon countries and those from Southern Mediterranean ones showed a preference for being led, which implies they had a preference for companies that are hierarchically structured. A large proportion of the Spanish managers surveyed wanted to work for a boss who was benevolently paternalistic. Anglo-Saxon managers wanted to be led by bosses with superior ability, who could be held accountable for their professional decisions. French managers preferred structural arrangements with high power distances between levels and little opportunity for subordinate participation. There was therefore little communication between levels.
Although we have drawn attention to the differences in work cultures within Europe, it must be mentioned that in the last decade several global companies in Europe have given attention to the concept of high-performance work teams. These teams are self-managed , self-organized and self-regulating. They believe in open communications as well as peer selection and peer review. The University of Strathclyde Graduate Business School made a recent video documenting a high-performance work group created by the multinational Digital Corporation at their plant in Ayr, Scotland, that has attracted some interest in Europe. The characteristics of the Ayr high-performance work teams are that they have 'front to back responsibility', targets set by team members, members who develop themselves laterally so that they have multiple skills, members who share their knowledge base and skills, a reward system that is based on skills and how those skills are applied, and are committed to high levels of performance.
High-performance teams in Europe have proved to be a mixed blessing, despite all the hype accompanying their actual functioning. Commentators have shown themselves unable to decide whether empowerment, self-determination and team operations are decidedly better than supervision and control, or individual performance. Some of the authority mandated to high-performance work teams has been retracted. Some teams have been asked to maintain the levels of performance they initially displayed, while being given less authority than before. Bergstrom (1994) reported that he found frustration, disenchantment and distrust in a premier European corporation that had introduced high-performance work teams.
Keeping in mind some of the cultural features of Japan, the United States, and Europe that have been discussed above, we now examine how the structural changes undertaken by Royal Dutch Shell will impact on its operations in these three cultures.
It is expected that the team approach will find favour in Japan. Team incentives will also be well received. Group problem solving is well entrenched now in Japanese companies and among Japanese managers. Hence, when Royal Dutch Shell 'initiates' a team approach at its Japanese branch, its Japanese managers will be operating in a fashion that finds ready favour with them. They are likely to adopt an organizational structure that is networked enough to permit the free flow of discussion and cooperation without which true teamwork is problematic .
However, the structure would not be entirely delayered. Japanese managers are accustomed to deferring to their seniors and accommodating some measure of hierarchy. The fascinating feature of Japanese management is that hierarchy coexists with the notion of teams and distributed participation. Teams are constituted so that they comprise managers of the same level. Generally, these teams are self-managed. Nonetheless, Japanese managers feel comfortable communicating their team decisions to senior managers and then receiving affirmation from them. As far as Royal Dutch Shell is concerned, this would suggest that they might have to train Japanese teams to be more self-confident about the quality of their decisions, as well as to accept responsibility for those decisions. Japanese teams have to learn to do without the notion that their decisions are going to be vetted by more experienced people. This slight shortfall is more than offset by the fact that the team approach and team incentives will take root quicker and work much better in Japan than in the United States or Europe.
The expectation here is that the team approach will meet with resistance initially. US managers are trained, at US business schools and on the job, to be individualistic and achievement oriented. This orientation is further reinforced by the prevailing culture at large. One of the driving forces of US managers is to be rewarded for superior performance. Any attempt to introduce team incentives therefore is likely to be met with stiff opposition . However, US managers have been known to work reasonably well in teams after a corporation has made this structure an explicit policy. Team behaviour is a skill that US managers have to consciously and deliberately learn. Like many management skills it can be learnt, despite the cultural context.
US managers have employed a multi-pronged attack to foster teamwork. First, a significant amount of research in the United States has been devoted to the notion of team building. Not surprisingly, the team building process as recommended by US academicians would appear contrived to managers from cultures like Japan. Second, attention is paid to the development of teams through management training. Third, some companies formally evaluate their managers with regard to team behaviour in performance appraisal systems. This gives US managers a goal to work towards, the goal of being a team player. The individualistic orientation of US managers is usually accompanied by goal-directed behaviour. Corporations have harnessed this very tendency of US managers to work towards goals to encourage them to become team players. The organizational structure that Royal Dutch Shell would need for their branch in the United States would be one that does not accord any special status to a member of a team. This would entail dispensing with hierarchy and one-way communication. Additionally, lateral communication, fewer levels in the branch, and increased transparency will need to be firmly established. Ultimately, team incentives will be accepted provided they are introduced after the managers have been adequately prepared for their new roles.
In Europe, the team concept is likely to be accepted in principle by Royal Dutch Shell managers. However, it has to be kept in mind that there is variation regarding culture and management practices within Europe. Challenges are most likely to be thrown up when managers from different European countries have to work together as a team.
Scandinavian managers are known to have a penchant for group work and consensual decision making. They have shown this in practice in managerial settings. The British claim to have first propounded the benefits of restructuring work design by focusing on teams. Britain's Tavistock Institute of Human Relations has done pioneering work in this area. The French on the other hand subscribe to the notion of status and differentials. Germans prefer to work in a structure that has its authority unambiguously defined. Hence, the intervention effort to make German or French managers work in teams would have to be designed differently from that for Scandinavians.
The task of inducing team behaviour is complicated when managers of different European nationalities work together. It can be done, however, through training and mentoring. For Royal Dutch Shell the implications for organizational structure are that complete decentralization will be called for. The reporting relationships will have to be to peers rather than superiors. A few levels of authority may have to be removed altogether, so that managers can fall into teams at uniform levels.